By John Vandermosten, CFA



We are initiating coverage of RVL Pharmaceuticals, plc (NASDAQ: RVLP) with a valuation of $3. 60 per share. RVL’s lead and only marketed asset is Upneeq®, a product developed to treat acquired blepharoptosis, or low-lying eyelids. Following approval for Upneeq in July 2020, RVL embarked on a structured commercialization effort with regard to the product, initially targeting eye care, then later ophthalmology, optometry, and oculoplastic specialties. In early 2022 the company launched its expansion into the medical aesthetics market and has now begun to penetrate aligned practices.

Upneeq is able to address acquired blepharoptosis otherwise known as ptosis, the condition where the eyelid does not fully raise. RVL’s predecessor company conducted clinical trials to evaluate the safety and efficacy of RVL-1201, later branded Upneeq. The clinical studies demonstrated statistically significant improvement in visual field plus in Marginal Reflex Distance (MRD) vs . baseline. Safety was exceptional for Upneeq with a profile similar to vehicle as evidenced in the three Phase III research that were carried out. The favorable performance supports long term use of the product with no expected negative drug-related side effects.

In an effort to maintain control over the product, RVL has launched its own pharmacy which is able to distribute in order to providers and patients. It is also able to hold virtual inventory plus ship directly to patients prescribed the treatment in states where physicians are not allowed to sell directly. Controlling its own pharmacy allows the particular company to maintain pricing discipline and gain greater efficiency by avoiding value bleed away from third-party distributors.

We expect Upneeq in order to benefit from strong demand through the aesthetics market. Our review finds that the global appearance market will be upwards of $100 billion dollars per year in related sales and demand is growing at double digit percentages. Regions inside Asia and South America are rapidly expanding plus building on a solid market in North America. Upneeq falls into the similar category of products and services that include brands such as Botox, Latisse, QWO and Sculptra that improve appearance, increase self-confidence and improve personal and professional interactions. Other drivers regarding growth in the segment include a greater number of effective products and substantial growth in looks service providers. Upneeq is usually complementary to other products in this category and is expected to grow much faster than the particular industry given the lack of comparable treatments plus low penetration rates.

RVL Pharma is definitely distinct from others in the appearances space in that it provides an item that raises the eyelids plus is classified as a medicine rather than the procedure. There is no direct competitor that performs a similar function; however , many complementary items exist including fillers and skin treatments. Upneeq furnishes attractive margins for companies and easy access to prescriptions for individuals, giving an incentive for practices to prescribe the item.

RVL has begun commercialization of its product inside the United States and it has entered into a partnership with Japan-based Santen Pharmaceutical for further development and commercialization. Santen offers rights within Asia, Europe, Middle East and Canada with the potential to develop other regions. The particular partner can be now running clinical tests with Upneeq in Japan and may be able to obtain regulatory approval and achieve first product sales by 2025. RVL provides rights in order to royalties plus milestones through future sales.

Key reasons to personal RVL Pharmaceuticals shares:

➢ Large potential good looks market to address low lying eyelids

o ~60% of women self-identify because having some degree of the particular condition

u Prevalence of acquired form reported in a rate between 5 to 14%

➢ Holds rights to the only approved non-surgical treatment intended for ptosis

➢ Able to leverage multiple marketing and educational channels

o Social media

um Traditional advertising direct in order to consumer (DTC)

o Medical conferences plus trade shows

➢ Global market for Upneeq

o Collaboration with Santen for Asia, EMEA and Canada

o Clinical studies have started in Asian countries

➢ Owned Pharmacy

o Storefront subscription model

o Attractive for provider partners

➢ Operates in cash-pay markets

u Eliminates dependence upon plus complexity associated with reimbursement

o Avoids negotiations with insurers and government payors

o Allows for low cost, direct distribution (Direct Dispense/Virtual Inventory)

RVL Pharma is commercializing Upneeq as an aesthetic product in the United States and has further opportunity in the rest of the world through partner efforts. In our initiation we provide a review of the medical aesthetics marketplace and the particular opportunity that will awaits a good effective treatment for low lying eyelids. We follow with an in-depth description of obtained blepharoptosis (ptosis), including the prevalence, causes, symptoms, diagnosis and therapy. Subsequent sections summarize the mechanism of action plus supporting clinical trials to get Upneeq as well since an appraisal of advancement candidate arbaclofen. The report explains the particular structure associated with the company’s pharmacy and distribution approach and upcoming initiatives in e-commerce. We review RVL’s patents plus identify the general and specific risks faced by a biotech company and RVL in particular. The research report scrutinizes the primary peers and competitors within the aesthetic medicine space plus introduces key management figures. Our closing sections provide an outline of important milestones, a summary of the most recent financial overall performance and operational history highlighting Upneeq’s path from authorization to present day commercialization activities. All of us wind down the initiation with our own valuation. It provides the assumptions behind our revenue and margin forecasts and our combined multiple associated with earnings plus multiple of earnings before interest, taxes, depreciation and amortization (EBITDA) model. Based on this work we generate a valuation of $3. 60 for each share.

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